Quality Management

Quality is the ability of a product or service to

consistently meet or exceed customer
expectations.
 Dimensions of Quality
• Performance - main characteristics of the product/service
• Special features - extra characteristics
• Conformance - how well product/service match to customer’s
expectations
• Aesthetics - appearance, feel, smell, taste
• Durability - useful life of the product/service
• Reliability - consistency of performance
• Service after sale - handling of customer complaints or checking on
customer satisfaction
 Examples : Dimensions of Quality

Dimension (Product) (Service)

Automobile Auto Repair
1. Performance Everything works, All work done, at agreed
Ride, handling, grade of price
materials used Friendliness, courtesy,
Competency, quickness
2. Aesthetics Interior design, soft touch Clean work/waiting area

3. Special features Cellular phone, CD Location, call when read

Convenience player Computer diagnostics
High tech

4. Safety Antilock brakes, airbags Separate waiting area

 Examples : Dimensions of Quality

Dimension (Product) (Service)

Automobile Auto Repair
5. Reliability Infrequency of breakdowns Work done correctly,
ready when promised

6. Durability Useful life in miles, resistance Work holds up over

to rust & corrosion time

7. Perceived Top-rated car Award-winning service

quality department

8. Service after Handling of complaints and/or Handling of complaints

sale requests for information
The Consequences of Poor Quality

• Loss of business

• Liability

• Low productivity
 Costs of Quality
• Failure Costs
– Internal
– External
• Appraisal Cost
• Prevention Costs
 Costs of Quality
• Failure Costs - costs incurred by defective
parts/products or faulty services.

• Internal Failure Costs

Costs incurred to fix problems that are detected before the
product/service is delivered to the customer. Examples;
Material, labor and capacity loss, scheduling
difficulties for re-work

• External Failure Costs

All costs incurred to fix problems that are detected after the
product/service is delivered to the customer. Examples;
Returned products, loss of goodwill, liability, claims
 Costs of Quality
• Appraisal Costs
Cost of inspecting material, parts, and products
to to ensure their conformance with quality standards
Example; labor and material cost of inspecting
equipment, cost of interruption in production

• Prevention Costs
Cost of preventing defects from occurring
Example; Total Quality Management costs
 Key Contributors to Quality Management

Contributor Known for

Deming 14 points; special & common causes of
variation

Juran Quality is fitness for use; quality trilogy

Crosby Quality is free; zero defects

Ishikawa Cause-and effect diagrams; quality

circles
Qu ali ty
 Deming

A professor of statistics in 1940s.

Went to Japan after WWII to assist Japanese in improving quality
and productivity.

Japanese established Deming prize for quality.

Deming was unknown in his home country until 80s

He developed a famous list of 14 points he believed were key for

quality in organizations.

His message was; System is the cause for inefficiency and poor
quality not employees. It is management’s responsibility to
improve the system.

The essence of his 14 points are; Constancy of purpose,

continuous improvement, profound knowledge.
 Deming : Profound Knowledge
Profound knowledge is; appreciation for the system, theory of
variation, theory of knowledge, and psychology.

Appreciation for the system;.Every one in the organization

working to achieve overall optimization. Management most
eliminate internal competition.

Theory of Variation; Variation reduction is an important key to

quality. There are two types of variations; random and correctable.
We should concentrate on the later.

Theory of Knowledge; Knowledge comes from theory. Learning

can not occur in an organization without a theory of knowledge.

Psychology; Workers want to create and learn. Management’s

greatest challenge is to motivate workers to contribute their
common effort to achieve a common goal.
 Deming’s 14 Points
1.Constancy of purpose toward improvement.
2.We can no longer live with defects and delays.
3.Forget mass inspection, rely on statistical process control (SPC).
4. Eliminate unqualified suppliers. Not just price, but Price + quality.
5.Work continually on the system, identify problems, resolve them.
6.Institute modern methods of training on jobs.
7.Responsibility of foremen is not productivity but quality, which in turn
improves productivity. Management takes immediate action on foremen
requests regarding improvement in elements of the system.
8.Drive out fear, so that every one may work effectively for the company.
9.Break down barriers between departments. Motivate team work.
10.Do not ask for more productivity, without providing methods.
11.Eliminate work standards that prescribe numerical quotas.
12.Break down barriers between hourly and permanent workers.
13.Institute a vigorous program for education and retraining.
14.Top management will push every day on the above 13 points.
 Juran

He made his first trip to Japan after publication of his Quality Control
Handbook in 1951.
His method is close to that of Deming, but with two main differences.
1) Management of quality is not very difficult.
2) He places less emphasize on SPC.
His initiatives;
Quality begins by knowing what customer wants. Quality is fitness-for
use.
Almost 80% of quality defects can be controlled by commitment of
management to continuos improvement.
Quality management is 1) quality planning, 2) quality control, and 3)
quality improvement.
He showed high cost of low quality, and potentials of cost reduction
through quality improvement.
Quality Awards

Baldrige Award

Deming Prize
Malcolm Baldrige National Quality Award

1 Leadership (110 points)

2 Strategic Planning (80 points)
3 Customer and Market Focus (80 points)
4 Information and Analysis (80 points) Baldrige
5. Human Resource Development and Award
Management (100 Points)
6 Process Management (100 points)
7 Business Results (450 points)
TOTAL = 1000
haracteristics of Baldrige Award Winner

• The companies formulated a vision of what they

thought quality was and how they would achieve
it.
• Senior management was actively involved.
• Companies carefully planned and organized their
quality effort to be sure it would be effectively
initiated.
• They vigorously controlled the overall process.
 The Deming Prize

• Honoring W. Edwards Deming

• Japan’s highly coveted award
• Main focus on statistical quality control Deming
Prize
International Organization for Standardization
• ISO Series
• Set of international standards on quality management and
Quality assurance that are critical to international business
• Requires firms to document every thing they do that affects
the quality of goods and services.
• Document every step (incoming raw materials, product design,
in-process monitoring and so forth) to be able to identify those
areas that are causing quality problems and correct them.
 ISO 9000 Registration Process

• When an organization feels that its quality system is good

enough, it may ask for assessment.

• The audit begins with a review of the company's quality

manual. The audit team checks to see that the documented
quality system meets the requirement of ISO 9000 and that the
organization is practicing what is documented.
• When the registrar is satisfied with the recommendation of the
audit team, it issues a registration document to the company.
 ISO 9000 Series

ISO 9000 Helps companies determine which standard of

ISO 9001, 9002, and 9003 applies
ISO 9001 Outlines guidelines for companies that engaged in
design, development, production, installation,
and servicing of products or service
ISO 9002 Similar to 9001, but excludes companies
engaged in design and development
ISO 9003 Covers companies engaged in final inspection
and testing
ISO 9004 The guidelines for applying the elements of the
quality management system
Reading
The cost of quality, 401-402
Quality gurus 402-406